The United States of America for the use and benefit of IGW Electric, LLC v. Scarborough

Filing 16

MEMORANDUM ORDER - For the reasons set forth, Plaintiff's motion for default Judgment is DENIED, and Defendant's motion to dismiss for failure to state a claim is DENIED. Signed by District Judge Mark S. Davis on 1/23/2013; filed on 1/24/2013. (bnew) Modified on 1/24/2013 (bnew, ).

FILED
UNITED

STATES

DISTRICT

COURT

JAN 2 4 2013

EASTERN DISTRICT OF VIRGINIA

Norfolk Division
CLERK, U.S. HiSlRlCl COURT
NQPFG1.K. VA

UNITED STATES

For the

OF AMERICA,

Use and Benefit of

IGW ELECTRIC,

LLC,

Plaintiff,
Civil

v.

No.

2:12cv2 0 0

EDMUND SCARBOROUGH,

Defendant

MEMORANDUM

This

matter

is

before

the

ORDER

Court

on:

(1)

a

motion

for

default judgment filed by Plaintiff the United States of America
for

the use and benefit

and

(2)

a

summary

motion

to

judgment,

("Defendant"
both motions

or

of IGW Electric

dismiss,

filed

or

by

"Surety").

in

("Plaintiff"

the

alternative

Defendant

For

the

Edmund

reasons

set

or

"IGW");

motion

for

Scarborough
forth

below,

are DENIED.

A. Plaintiff's Motion for Default Judgement
Plaintiff's motion for default

the

Local

request,

or

dismiss
Va.

expired,

Civ.

of

waive,

results

Loc.

argues

Rules

in
R.

Plaintiff,

this
oral

Court,

judgment asserts

Defendant's

argument

on

Defendant's

such motion being deemed
7(E).

If

Defendant's

such

motion

period

and Defendant is in default.

for

failure

is

that,

under

to

timely

motion

"withdrawn."

to
E.D.

deemed withdrawn,

filing

an

answer

has

The Local
indicates

that

ordered."

Rule

Id.

relied on by Plaintiff,

such

Rule

is

The undersigned Judge,

expressly

"[u]nless

applicable

however,

otherwise

both

through practice,

and through the "Procedure for Civil Motions" document published

on this Court's public website,
"[a]bsent a request
not

discovery

has

adopted a practice whereby

for a hearing,"

related

"will

chambers

for

consideration.

Chambers

of

Mark

be

S.

all civil motions
referred

Procedure

Davis,

that are

automatically"
for

Civil

available at

to

Motions,

http://www.vaed.

uscourts.gov/localrules/Procedures%20for%20Civil%20Motions%20-

%20Judge%2ODavis.pdf.

To

the

extent

such

document

is

insufficient to qualify as an "Order" that varies from the Local
Rule,

this Court hereby ORDERS that the withdrawal provision set

forth

in

Local

Accordingly,

seeking

7(E)

is

inapplicable

in

instant

case

is

on

payment

a

a

Miller
bond

Act

payment

the

prime

required to obtain on a construction project

or

"Prime")

In short,

was

Compl.

SI

4.

Baker

Custom

Abbot,

as

Builders,

contract

prime

Inc.

to complete

contractor,

("JBCB")

action
was

("the Project")

Tommy Abbot and Associates,

awarded the

bond

contractor

build beach cottages for the United States Navy.
1.

case.

Defendant's Motion to Dismiss, or in the
Alternative, for Summary Judgment

recovery

ECF No.

this

Plaintiff's motion for default judgment is DENIED.

B.

The

Rule

Compl.

to

SI 2,

Inc.

("Abbot"

the

Project.

contracted with James

to

perform

general

contracting work.

Compl.

subcontractor,

perform

Project.
having

to

Compl. 9[ 5.
a

written

expressly

JBCB then contracted with IGW,

all

of

the

electrical

work

for

a

the

The Complaint asserts that in addition to

contract

express contract (s)
Complaint

5 5.

with

JBCB,

IGW

directly with Prime.
asserts

that

had

implied

Compl.

IGW

and/or

191 11-12.

performed

work

on

The
the

Project from 4/2/2010 until 4/14/2011 and provided materials for
the Project between 4/2/2010 and 4/27/2011.
To

the

extent

Defendant

seeks

to

recast

dismiss as a motion for summary judgment,

It

would be

imprudent

at

this

as

set

forth

in

the

Complaint

ECF No.

and Def.

the Court can speculate as

of materials

to

9,

to

the date of

limitations

the

pending

that

IGW

period).

motion

remains permissible

failed
Although

into
to

a

to

the

to

proceeding,

motion

the

9

competing

(suggesting that
final delivery

to when during the

work on the

comply

the

on

IGW's

to the Project or speculate as

find

motion

See Def.'s Brief 12,

ECF No.

day a meeting was held terminating all
order

in

based

events advanced by Defendant.
Reply Brief

its

to entertain attacks on the

version of
6,

15, 23.

such motion is DENIED.

early stage

prior to discovery being conducted,
facts

Compl. M

with

Court

for

the

declines

summary

consider any extrinsic

Project
Miller
to

Act

convert

judgment,

evidence

in

that

it
is

"'integral to and explicitly relied on in the complaint'" if the

authenticity

of

such

evidence

is

not

in

dispute.

Am.

Chiropractic v.

Trigon Healthcare,

2004)

Phillips

(quoting

(4th Cir.

In
dismiss,
factual

assessing
a

the

district

v.

allegations

contained

inferences

(4th Cir.

state a
Atl.

to

in

2012)

Corp.

Giarratano

satisfy

Inc.,

234

190

(4th Cir.

F.3d

609,

618

motion

such

that

the

plausibility

as

true

complaint'

to

440

is

Kensington

Md.,

2011)).

allege

plausible

standard,

the

684

F.3d

du Pont de Nemours & Co.

(4th Cir.

298,

of

'draw all

the plaintiff.'"

U.S.

F.3d

all

and

Montgomery County,

550

521

12(b)(6)

accept

of

v.

Rule

complaint must

Twombly,

Johnson,

a

(quoting E.I,

to relief

v.
v.

a

in

favor

Inc.

dismiss,

claim

of

"'must

Kolon Indus. ,637 F.3d 435,

a motion

Int'l

merits

court

Volunteer Fire Dept.,
467

LCI

F.3d 212,

1999)).

reasonable

462,

v.

367

302

a

"enough facts

on

544,

To survive

its

570

face."

(2007);

(4th Cir.

Bell
accord

2008).

plaintiff's

to

To

"[f]actual

allegations must be enough to raise a right to relief above the

speculative level on the assumption that all the allegations in
the complaint

550

U.S.

at

are

555

true

(even if

(internal

doubtful

citation

in

fact)."

omitted) .

As

Twombly,

always,

the

above standard is applied in light of Rule 8(a)'s requirement of
only "a short and plain statement of
pleader is entitled to relief."
Under
tier

the

Miller

subcontractor"

Act,

that

a
does

the claim showing that the

Fed. R. Civ.

P. 8(a)(2).

"sub-subcontractor"
not

have

a

or

direct

a

"second

contractual

relationship with the prime contractor can only recover from the
prime

or

the

prime's

surety

if

written

notice

of

any

unpaid

claims is made to the prime contractor within ninety days of the

sub-subcontractor's completion of performance,
of materials.

to

40 U.S.C.

acknowledge

that,

§ 3133(b)(2).

at

least

or final delivery

IGW's complaint appears

initially,

IGW

was

a

"sub-

subcontractor" as IGW only had a direct contractual relationship
with

JBCB,

the

complaint,
support

however,

three

Prime/Surety:

by Prime,

general

alleges

potential
(1)

3133(b)(2)

"express
must

theories

and payment was made

contract

or

comply

implied"
with

of

to

Prime

that

a

Prime.

facts

recovery

that
by

The

plausibly

IGW

against

IGW's bills were approved

IGW directly from Prime,

and

IGW,1

thus

see

ninety-day

relationship
written

with

notice

as

creating an

40

sub-subcontractor

contractual

the

by

and payment by JBCB,

between

(indicating

hired

additional

during the Project,

contrasted with approval

implied

contractor

U.S.C.

lacking

the

§
an

prime

provision)

1 The Court recognizes, as argued by Defendant in his reply brief, that
the existence of the express contract between IGW and JBCB may
ultimately be sufficient to demonstrate that there was no implied
contract between IGW and Prime.
See S. Biscuit Co. v. Lloyd, 174 Va.
299, 311 (1940) ("[A]n express contract defining the rights of the
parties.necessarily precludes the existence of an implied contract of
a different nature containing the same subject matter.").
However, as
the express contract between IGW and JBCB is not before the Court at

this time, and because the factually undeveloped relationship between
the three entities may prove legally relevant, it is premature to
dismiss the case on such ground at this time.
Cf. Elegant Homes of
Virginia, Inc. v. Boberski, 70 Va. Cir. 377, 378 (Va. Cir. Ct. 2006,
Albemarle, Cnty.) (indicating that S. Biscuit Co. "does not speak to
whether an implied contract can be imposed on one who was not a party
to the express contract") (emphasis added).

(emphasis
States

ex

added) ;
rel.

see

Bd.

also
of

Industry Pension Fund,
the

ninety-day

materialmen"
days,

434 U.S.

notice

to

pay

his

to

apparently

unfounded

fear

sub-subcontractor

Prime

586,

Co.,

Nat.

590
for

Inc.

v.

Automatic

(1978)

United

Sprinkler

(indicating that

"sub-subcontractors

subcontractors

if

every

submitted

the

prime)

(internal

(2)

during

the

without

sub-subcontractors

is

for

of

provision

liability

omitted);

Bateson

Trustees

additional

by

W.

or

is in place to allow a prime "after waiting ninety

safely

paid

J.

the

performance

invoice

to,

of

of

materialmen"—an

from

approved

the purported

by,

and

directly

marks

quotation

Project,

or

fear

and

citation

IGW contracted directly with

certain

electrical

work

that

unexpectedly arose on the job site and IGW has not been paid for
such work;

and

(3)

even if

IGW is

merely a

"sub-subcontractor"

that lacks any type of contractual relationship with Prime as to

the bulk of
provided

the unpaid electrical work performed by IGW,

Prime

written

outstanding payments
set

forth by

notice,

owed

to

the Miller

Act,

on

behalf

IGW within
compare

the

Use
that

620

of

(E.D.S.C.

Malloy,

although

statute is

239

1958)

F.2d

"'giving

(quoting Bowden

572,

of

577

States

Inc.,

v.

(9th Cir.

the written notice

a condition precedent

IGW,

of

the

ninety-day period

United

Benefit of Noland Co. v. Skinner & Ruddock,
616,

of

JBCB

for

Use

&

164 F. Supp.

United

States

1956))

(indicating

specified by

to the right of a

for

the

supplier to

sue on the payment bond,'" such writing can be sent or presented
to the prime contractor by the supplier "'or on the authority of
the

supplier'")

Martinez

v.

(emphasis

Encon

Int'l,

Inc.,

(same) ,

with

United

Tex.

2008)

J.A.

Edwards Co.

(2d

Cir.

v.

1959)

contractor

to

(indicating

a

prime

"that

on

the

.

.

F.

United
Supp.

States

that

to

because

Corp.,

273

a

provided

of

876-77

by

a

materialman

the Miller Act's

notice

(W.D.

provided
to

rel.

Benefit

F.2d 873,

owed

or

ex
756

and

notice

in

ninety-

that

case

was making any direct

and [the prime's]

. project

Use

debt

a

States

2d 754,

the

satisfy
the

for

[the materialman]

claim against [the prime]
furnished

571

regarding

failed

notice provision

did not indicate

and

Thompson Const.

(sub-subcontractor)
day

added),

that

surety for materials
[the

contractor]

was

making any such claim on [the materialman's] behalf").2
Based on

the

above,

the

Court

finds

that

IGW's

complaint

satisfies the plausibility standard set forth in Twombly and its
progeny.

IGW has advanced sufficient facts supporting more than

one alternative theory of recovery against Surety.3

2

The

Court's

conclusively
demonstrates

viewed

in

citation

resolve
that

to

any

the facts

Plaintiff's

favor,

the
of

above

the

cases

disputed

is

not

issues,

and reasonable inferences

plausibly support a

Defendant's

intended
but

therefrom,

cause of

to

instead
when

action on

one or more alternative theories.

3 The Court notes that IGW attached several exhibits to its complaint,
including the written contract between IGW and Prime for performance
of
a
relatively minor
electrical
repair that
apparently became
necessary during the Project.
Defendant does not dispute that IGW is
not required to comply with the ninety-day notice provision as to the
work governed by such express written contract.

motion

to

dismiss

for

failure

to

state

a

claim

is

therefore

DENIED.

C.

For

default

the

Judgment

for failure

filed

in

this

by

candidate

for

a

The Court
in

and

16(b)

nature

referral

participate

above,

Plaintiff's

Defendant's

claim is DENIED.

Plaintiff,

conference.
to

case,

the

forth

DENIED,

Additionally,

infancy,

sought

is

set

to state a

conducted.

its

reasons

Summary

such

scheduling

although

of

the

appears
to

a

As

this

to

encourages
settlement

to

conference
is

and

dollar

this

the parties

case

for
to

proceedings

should

is

be

procedurally in

the

Judge

for

dismiss

soon as an answer

render

Magistrate

motion

case

dispute,

motion

a

a

amount
prime

settlement

mutually agree

at

the

earliest

stage practicable.
The
Order

Clerk

to all
It

is

SO

is

REQUESTED

counsel

to

send a

copy

of

this

Memorandum

of record.

ORDERED.

s^

/s/(
Mark S.

Davis

United States District Judge
Norfolk,

Virginia

January S3 , 2013